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<\/p>\nAbout 40% of young adults cannot afford to buy one of the cheapest homes in their area even with a 10% deposit, according to a new research. The Institute for Fiscal Studies said house prices in England have risen by 173% over two decades.<\/p>\n
But average pay for 25-34 year-olds has grown by just 19% over the same period.
\nIn 1996, 93% of those with a deposit who borrowed four and a half times their salary could purchase a home but that fell to 61% in 2016.<\/p>\n
The IFS also said that higher rental costs – up from an average \u00a3140 a week to \u00a3200 a week in England – have “reduced the purchasing power of young adults’ incomes” and made it harder to save for a deposit.
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Bradley Tucker, a 27-year-old recruitment worker from King’s Langley in Hertfordshire, is struggling to save for a deposit.<\/p>\n
He and his partner have moved from a rented flat to a shared house, so they can start to save something.<\/p>\n
But while his dad – a bricklayer – managed to buy a house after just one year, Bradley estimates it will take them at least a decade.<\/p>\n
“On a current trajectory, the cheapest deposit is \u00a315,000 to \u00a320,000, so you’re looking at 10 years plus,” he told the BBC.<\/p>\n
“For young people, it seems an almost impossible challenge. It’s a depressing outlook.”<\/p>\n
The IFS said that it is key for the government to increase the supply of homes.<\/p>\n
It said that planning restrictions, such as within the Green Belt, prevents the construction of new homes in response to demand.<\/p>\n
“Without increasing supply, policies to help young adults get onto the housing ladder will continue to push up house prices – and potentially rents too, which would hurt those young adults who will never be able to buy their own home,” it said. Read more<\/a><\/p>\n